Value Creation in the Middle Market: What 15 Years of Data Reveals About High-Growers

What’s the difference between the middle-market companies that grow at incredible speed and those that merely keep pace?

After studying the middle market for 15 years, our data is pointing us to some answers.

The National Center for the Middle Market has studied this middle-third of the economy since our founding in 2011. Since, we’ve surveyed more than 41,500 middle-market executives for the Middle Market Indicator, a regular survey to gauge growth, sentiment, and strategy.

This longitudinal view of the data has provided us with a deeper understanding of this segment’s growth trajectory and the remarkable way it has evolved.

Before the pandemic, approximately one-third of middle-market companies consistently achieved annual revenue growth of at least 10%. By late-2021, that proportion had reached 56%, and it remained above 50% through 2025.

This statistic naturally leads to the question behind the numbers: what is this high-growth cohort doing to achieve such growth? And, just as importantly, what can other business leaders, investors, advisors, and dealmakers learn from them as they seek to emulate the same type of result?

The Companies That Grow Fastest Invest Differently

One of the clearest lessons from our research analysis is that exceptional growth rarely happens by accident.

High-performing middle-market companies consistently demonstrate a willingness to invest ahead of revenue. This means that they are investing based on the businesses they expect to become, rather than simply maintaining the organizations as they are today.

The nature of those investments has evolved, with the investment trend changing every few years. Below, we outline these “eras” of investment, and share data snippets that compare very high growth companies (20%+ in revenue growth) to all other middle-market companies

• 2012 – 2015: Investment in acquisitions. During this time horizon, 28% of very high-growth companies made an acquisition, compared with 18% of their peers.
• 2016 – 2019: Investment in talent. Twenty-five percent of high-growth companies grew their workforce
• 2021 – 2024: Investment in innovation and research & development. High-growth companies invested an average of 30% of revenue in R&D, while the rest of the middle-market cohort invested closer to 16%.
• 2025 and beyond: Investment in technology. Our latest data shows that 91% of high-growth companies are utilizing AI, while the bulk of the middle market averages out at 80%.

While the investment strategies have changed, the underlying behavior has remained remarkably consistent: Companies anticipating growth commit resources to building the capacity, talent and capabilities needed to achieve it.

Our analysis also points to the importance of maintaining investment through economic uncertainty. Through inflation, changing interest rates, geopolitical tensions, and more, high-growth companies are actively positioning themselves to be responsive when conditions improve.

For investors and operators, this suggests that evaluating growth potential requires looking beyond current financial performance to understand a company’s willingness and ability to invest for the future.

Private Equity’s Growing Role in Value Creation

As private equity has become an increasingly important participant in the middle market’s growth story, we are also seeing correlations to high growth and PE involvement.

Our research study on private equity in the middle market revealed meaningful differences between PE-backed companies and their non-PE-backed peers.

From July 2024 to July 2025, PE-backed middle-market companies reported average revenue growth of 12.9%, compared with 10.4% among companies without PE backing. Employment growth was also higher, at 9% versus 6.1%, while PE-backed firms reported stronger EBITDA margins.

These differences are not limited to a single year. Our Middle Market Indicator has consistently shown a revenue growth advantage among PE-backed companies across reporting cycles since 2014.

While private equity firms may be more likely to invest in the companies with the highest growth potential to begin with, the research also points to meaningful benefits. Among PE-backed companies surveyed, 43% cited faster decision-making as a benefit of private equity involvement, while 40% pointed to operational improvements and 36% to accelerated progress toward long-term goals.

These findings reinforce an important shift in the private equity value-creation conversation.

With higher financing costs and less certainty about future valuations, sustainable returns increasingly depend on what happens inside the business: strengthening management teams, improving operations, developing new capabilities, and identifying opportunities for profitable growth.

Private equity partners can contribute capital, but also strategic guidance, industry expertise, relationships, and operational discipline that help companies execute on those opportunities.

Implications for Business Leaders and Investors

The research offers several practical lessons for companies seeking growth and the investors evaluating their potential.

First, sustained investment matters. Strong businesses don’t simply respond to opportunities as they emerge; they develop the people, technology, and infrastructure required to capture them.

Second, operational capabilities are increasingly important to value creation. Financial resources alone are rarely sufficient to deliver a successful growth strategy. Leadership, execution, and organizational discipline can be just as consequential. (NCMM looks forward to sharing a report in March that delves deeper into this important topic.)

Third, the right partnership matters.

Private equity is not the best fit for every company. Business owners must weigh the potential benefits of outside capital and expertise against considerations such as autonomy, cost, and performance expectations.

Our research found that 43% of surveyed companies without PE backing were at least somewhat likely to consider private equity investment within the next three years. At the same time, 57% of all surveyed companies believed traditional bank lending had become more restrictive.

Together, these dynamics suggest continued opportunities for investors and business owners to explore new approaches to financing, partnership, and growth.

The Next Chapter of Middle-Market Growth

As the Center celebrates 15 years of research, alongside the inaugural National Middle Market Week that took place in October, we have an opportunity to reflect on just how much this segment has evolved.

Middle-market companies have navigated economic recovery, expansion, a global pandemic, inflation, rising interest rates, and significant policy uncertainty. Throughout those cycles, they have demonstrated a remarkable capacity to optimistically invest in their own growth.

The next 15 years will undoubtedly bring new challenges and opportunities. AI and emerging technologies will transform how companies operate and compete. Ownership transitions will continue to reshape the business landscape, while changing capital markets will create new opportunities and decisions for business leaders.

But if our research has taught us anything, it is that the fundamentals of sustained growth endure.

The companies best positioned for the future will be those willing to invest before opportunity becomes certainty, develop the capabilities needed to compete, and build partnerships that help turn ambition into performance.

For the investors, dealmakers, and business leaders who work alongside them, understanding those behaviors may be one of the most important opportunities of the next decade.

Doug Farren is executive director of the National Center for the Middle Market at The Ohio State University Fisher College of Business. The Center conducts research and provides insights to advance understanding of the U.S. middle market and its vital contribution to the economy.

ACG Insights is produced by the Association for Corporate Growth. To learn more about the organization and how to become a member, visit www.acg.org.